Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228365
Authors: 
Alcalde, José
Dahm, Matthias
Year of Publication: 
2020
Series/Report no.: 
CeDEx Discussion Paper Series No. 2020-01
Abstract: 
We study the effects of affirmative action through endogenous set-asides. We propose a share auction for dual sourcing in which more intensive affirmative action strengthens the favoured provider. This has the potential to level the playing field and induce more competitive procurement overall. Our main result provides a condition under which affirmative action not only guarantees very substantial minority representation, but also reduces the buyer's provision cost compared to a first-price auction. We also show that our main result is robust to variations of our benchmark model, including the assumptions specifying what providers know about each other, and how affirmative action programs are implemented.
Subjects: 
Affirmative Action
Bidding Credits
Bidding Preferences
Set-Asides
JEL: 
D44
D47
H57
J15
Document Type: 
Working Paper

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